Oil prices fell on Thursday, slipping back from four-month highs as investors focused on the risk that emerging market crises and trade disputes could dent demand.

Benchmark Brent crude oil was down 70 cents a barrel at $79.04 by 0830 GMT. U.S. light crude fell $1.15 to a low of $69.22 a barrel.

The International Energy Agency said on Thursday that although the oil market was tightening at the moment and world oil demand would soon reach 100 million barrels per day (bpd), global economic risks were mounting.

“Things are tightening up,” the agency said in its monthly report, but added: “As we move into 2019, a possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the U.S. dollar raising the cost of imported energy.”

“In addition, there is a risk to growth from an escalation of trade disputes,” the Paris-based agency said.

U.S. companies in China are being hurt by tariffs in the growing trade war between Washington and Beijing, according to a survey, prompting U.S. business lobbies to urge the administration of U.S. President Donald Trump to reconsider its approach.

The White House has invited Chinese officials to restart trade talks just as it prepares to escalate a trade war with China with tariffs on $200 billion worth of Chinese goods.

Short-term, the outlook is for tighter supply.

Brent rose above $80 per barrel on Wednesday for the first time since May, spurred by expectations that U.S. sanctions against Iran’s oil exports, which will start in November, will tighten global markets.

U.S. light crude pushed over $70 on Wednesday due to falling U.S. crude inventories and production levels.

The IEA said tightening supply was putting increasing pressure on prices: “The price range for Brent of $70-$80 per barrel in place since April could be tested,” it said.

U.S. crude stocks fell 5.3 million barrels in the week to Sept. 7 to 396.2 million barrels, the lowest since February 2015 and about 3 percent below the five-year average for this time of year, the U.S. Energy Information Administration (EIA) said on Wednesday.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said the inventory data showed “a much deeper drop than analyst’s expectations”.

U.S. crude oil production fell by 100,000 bpd, to 10.9 million bpd, as the industry faces pipeline capacity constraints. (Reuters)